globalisation Flashcards
what is globalisation?
process of closer integration of world’s markets. making countries more dependent on one another
what are the key characteristics of globalisation/global markets?
goods and services traded throughout world
people live and work in country of choice
interdependence between countries
free capital flows between countries
sharing of tech and intellectual property
what are the characteristics of developing markets?
increasing productive capacity movement away from primary sector industries increasing quality of life rapid industrialisation movement towards free market
why are emerging markets important?
drive growth in global economy
what are some key developing markets?
brazil, chille, china, colombia, egypt, greece, hungary, india
what are reasons for globalisation?
deregulation of markets internet improved communication reduced transport costs consumer tastes
what is market deregulation?
removal of government legislation and laws in a specific market
what does deregulation help do?
removes barrier to competition
attracts new firms
drives down prices
what is a disadvantage of market deregulation?
removal of bureaucracy and ‘red tape’
slows down business activity
adds to their costs
how has the internet allowed for globalisation?
enabled companies to speed up productivity
sped up info access
faster electronic payments
lower labour costs
what has the internet changed how people work?
enabled increased productivity sped up access to info faster electronic payments lowered labour costs establishment of MNC
what is containerisation?
system of standardised transport that uses a common size of steel container to transport goods
what do large cargo ships allow for?
cost of transporting goods between countries has decreased, allowing for quick and easy travel
what are strategies for global growth?
ansoff matrix
diversification
market/product development
what are pros and cons of globalisation?
\+economies of scale \+new markets and customers \+oppurtunities for business growth -loss of jobs in developed economies -fall in real wages -exploitation of developing countries
why do MNCs exist?
create competitive advantage
economies of scale
cheaper raw materials
government subsidies and tax incentives
why do business’ become MNCs?
increased market share
economies of scale
avoidance of trade barriers
how do MNCs benefit host nations?
increased levels of investment
more exports and fewer imports
transfer of capital
local companies can benefit from research and development
how do MNCs disadvantage host nations?
destruction of local competition
growth of MNC monopoly power which limits consumer choice
exploitation of labour
tech may be outdated
what is glocalaisation?
involves development and sale of products and services intended for the global market, adapted to local tastes, customs and traditions (think globally, act locally)
what are the key benefits of glocalisation?
global recognition of brand
increased sales due to adapted product
what are the key drawbacks of glocalisation?
constant need for market research
expense of adapting product range
limits opportunities for economies of scale
what are the benefits of UK firms to global markets?
opens up new markets outside of EU
GB as bran provides natural advantage
British export firms are more efficient than non-exporters
what are the drawbacks of UK firms to global markets?
job losses as manufacturing moves overseas
lower wages, due to costs cut to remain internationally competitive
British firms unable to compete against massive global companies
